[China Merchants Securities] Yum China 2Q26 Results Quick Look: Revenue and Same-Store Sales Continue Steady Growth Against Headwinds, Operational Resilience Highlighted

English summary

Overall results: In 2026Q2, the company achieved revenue of USD 3.14 billion (+13%), operating profit of USD 350 million (+14%), and adjusted net profit of USD 240 million (+14%). Despite a weak macro environment, both revenue and profit continued steady growth, with overall performance in line with our expectations. By brand, in 2026Q2, KFC/Pizza Hut achieved revenue of USD 2.34 billion/610 million, up +12%/+11% YoY; system sales grew +7%/+6% YoY, and same-store sales grew +1%/+1% YoY. KFC/Pizza Hut recorded operating profit of USD 330 million/50 million, up +14%/+11% YoY; restaurant margins were 17.1%/12.9%, up +0.2pct/-0.4pct YoY. The company's same-store sales continued positive growth, highlighting operational resilience. In terms of store openings, as of 26Q2, total store count was 19,297, +10.9% YoY, with a net addition of 560 stores in the quarter, a record high for Q2; ...